In 1882, Daimler purchased a villa in Taubenheimstrasse in the Cannstatt district of Stuttgart for 75,000 gold marks. The expansive garden contained a greenhouse, to which he added a brick extension to house an experimental workshop.
Daimler's basic plan was to create gasoline-only engines and use them to power every conceivable type of vehicle – on land, on water and in the air. He naturally returned to Otto's four-stroke technology as the basis for his engines. However, the complex ignition mechanism of the engine did not allow for high engine speeds.
After intensive testing, Daimler was granted a patent for an uncooled, heat-insulated engine with unregulated hot-tube ignition. Patent specification DRP 28022 was a masterpiece in terms of wording as, strictly speaking, it mirrored Otto's four-stroke principle. This sparked a bitter struggle in the patents court involving the Deutz company after Daimler refused free rights to use the unregulated hot-tube ignition system. However, the High Court upheld Daimler's claim after he made a personal appearance at the hearing. At the end of 1883, the first test engine was put into operation. It had been cast in the Kurtz bell-foundry and was listed in their records as a "small model engine". Thanks to hot-tube ignition and using an exhaust valve regulated by curved groove control, the engine reached 600 rpm. This comfortably outstripped the performance of all previous engines, the speeds of which were limited to a maximum 120-180 rpm.
The next test engine was known as the Grandfather Clock Engine on account of its appearance. The output of the first 1884 version was 1 hp at 600 rpm. This design, which focused on a light, compact construction, paved the way for Daimler and Maybach to install an engine in a motor vehicle. A wooden-framed motorcycle, often described as a "riding bike" or "riding car", was used as the first test object. The single-cylinder engine, which had been further reduced in size from the Grandfather Clock, was built into the vehicle under the driver's seat. On 28 August 1885, Daimler was awarded Patent specification DRP 36423 for this "vehicle with gas or petroleum drive machine". By the spring of 1886, Daimler had already ordered a vehicle, described as an "American" carriage, from the Stuttgart-based company W. Wimpff & Sohn.
Manufactured in Hamburg and assembled in Stuttgart, the vehicle was delivered on 28 August and secretly taken to Daimler's residence, apparently as a birthday present for Daimler's wife, Emma. The engine, which was fitted (including fifth-wheel steering) under the direction of Maybach in the Maschinenfabrik Esslingen mechanical engineering plant, generated 1.5 hp and was built according to the Grandfather Clock template. The engine's power was transmitted by belts. This Daimler "motorised carriage" was the world's first four-wheeled automobile.